On October 31, 2018, FERC accepted revisions to the Midcontinent Independent System Operator, Inc.’s (“MISO”) Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to enhance the locational aspects of its resource adequacy construct (“Filing”). In March of 2018 (“March 2018 Filing”), MISO had proposed a similar filing, which FERC rejected, without prejudice, on August 2, 2018. There, FERC found two elements of the March 2018 Filing to be unjust and unreasonable, but FERC provided MISO with guidance with respect to any future filing. With the exception of those two elements, MISO stated that its Filing contains the same proposal and justification for the proposal as in its March 2018 Filing. Continue Reading FERC Accepts Revisions to the Locational Aspects of MISO’s Resource Adequacy Construct

On October 23, 2018, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) in Maine Council of the Atlantic Salmon Federation v. FERC rejected a challenge brought by several conservation groups (“Petitioners”) in response to a FERC order amending the licenses for three hydroelectric projects on Maine’s Kennebec River. FERC’s order approved an an interim species protection plan for endangered Atlantic salmon and a handling and protection plan for shortnose and Atlantic sturgeon. The Petitioners raised issues arising under the Endangered Species Act and claimed that FERC’s order violated the Kennebec Hydro Developers Group Agreement (“Kennebec Agreement”), of which the licensees are parties. Continue Reading D.C. Circuit Rejects Challenges to FERC Amendment of Hydro Project License

On October 18, 2018, FERC denied several motions to stay an order issued on September 10, 2018, which invoked FERC’s rarely used authority under section 31 of the Federal Power Act to revoke the license for the existing 4.8-Megawatt Edenville Project No. 10808 (“Edenville Project”), located on the Tobacco and Tittabawassee Rivers in Gladwin and Midland Counties, Michigan. Motions to stay FERC’s revocation order were filed by licensee Boyce Hydro Power, LLC’s (“Boyce Hydro”), Sanford Lake Preservation Association, Wixom Lake Association, and the Gladwin County Board of District Commissioner (together, the “Lake Associations”). FERC denied the motion to stay because Boyce Hydro and the Lake Associations did not show that they would suffer irreparable non-economic harm if the stay were not in place. FERC also held that the stay did not violate the public interest. Continue Reading FERC Denies Stay of Hydro Project License Termination

On October 16, 2018, FERC proposed a new method to determine whether a utility’s return on equity (“ROE”) remains just and reasonable under section 206 of the Federal Power Act (“FPA”). Specifically, FERC discussed three additional methods, along with the well-known and traditionally used Discounted Cash Flow (“DCF”) analysis, and proposed to average the results to come to an equitable ROE. This new method will apply to successive complaints filed against the New England Transmission Owners (“NETOs”), regarding the justness and reasonableness of their existing ROE. Briefs related to this proposal are due on December 17, 2018. Continue Reading FERC Proposes Change in ROE Methodology, Directs Briefing

On October 18, 2018, in Order No. 850, the Commission approved new Critical Infrastructure Protection (“CIP”) Reliability Standards submitted by the North American Electric Reliability Corporation (“NERC”) in response to the Commission’s directive in Order No. 829. The new CIP Reliability Standards require responsible entities to take additional actions to address cybersecurity risks associated with the supply chain for Bulk Electric System (“BES”) Cyber Systems. FERC directed NERC to submit modifications to the new CIP Reliability Standards within 24 months of the effective date of its order, which is 60 days after the order’s publication in the Federal Register. Continue Reading FERC Approves Supply Chain Risk Reliability Standards

On October 10, 2018, the U.S. Senate passed S. 3021, the America’s Water Infrastructure Act of 2018 (“AWIA”), which contains several hydropower provisions that seek to amend the Federal Power Act (“FPA”) to promote hydropower development. The Senate passed the AWIA by a 99-1 vote. The AWIA was previously passed by the U.S. House of Representatives on September 14, 2018 and will now go to the President for his signature. Continue Reading Congress Includes Hydropower Provisions in Water Bill Sent to the White House

On October 1, 2018, FERC released its Strategic Plan for fiscal years 2018-2022. FERC affirmed its mission of maintaining reliable, efficient, and sustainable energy for consumers by setting three primary goals: (1) ensuring that rates, terms, and conditions are just, reasonable, and not unduly discriminatory or preferential; (2) promoting the development of safe, reliable, and efficient energy infrastructure that serves the public interest through the review of natural gas and hydropower infrastructure proposals; and (3) managing resourcing to support its mission through organizational excellence. Continue Reading FERC Releases Strategic Plan for FY 2018-2022

On October 2, 2018, PJM Interconnection, L.L.C. (“PJM”) submitted a filing at FERC (“October 2 Filing”) in response to a June 29, 2018 FERC order invalidating PJM’s capacity market rules (“June 29 Order”). FERC found PJM’s existing capacity market rules unjust and unreasonable because they do not consider the impacts state subsidies have on PJM’s capacity market. In the October 2 Filing, PJM proposes two alternative methods in response to the June 2018 Order: an expanded Minimum Offer Price Rule (“MOPR”) and Resource Carve-Out construct. Continue Reading PJM Proposes New Fix to Capacity Market to Address State-Subsidized Resources

On September 20, 2018, FERC partially accepted tariff amendments proposed by the California Independent System Operator Corporation (“CAISO”) aimed at improving the efficiency of its congestion revenue rights (“CRR”) market rules. Specifically, CAISO proposed to decrease the percentage of transmission system capacity available in the annual CRR allocation and auction processes from 75 percent to 65 percent (“Capacity Release Reduction Proposal”). FERC accepted the Capacity Release Reduction Proposal, finding it just and reasonable. CAISO also proposed to eliminate full funding of CRRs and instead scale CRR payouts, on a constraint-by-constraint basis, up to the extent that CAISO collects sufficient revenue through the day-ahead market congestion charges and charges to counterflow CRRs (“Scaling Proposal”). FERC, however, rejected the Scaling Proposal as not just and reasonable. Continue Reading FERC Partially Accepts CAISO Tariff Amendments Aimed at Improving Efficiency of Congestion Revenue Rights Market Rules

About The Firm

With a diverse practice mix, workforce and footprint, Troutman Sanders has cultivated its reputation for a higher commitment to client care for over 120 years. Ideally positioned to help clients across sectors realize their business goals, the firm’s 650 attorneys transact for growth, resolve mission-threatening disputes and navigate complex legal and regulatory challenges. See troutman.com for more information.